Essential Steps to Take Before the End of the Year
It’s about to be 2025. As you’re planning for the new year, it’s a great idea to review your estate plan or, if you don’t have one in place, to hire an attorney to help you create and implement the tools to protect your assets and ensure their orderly distribution in the event of your death. Here’s a checklist of things to do before the end of the year.
If You Don’t Have an Estate Plan
Your first step should be to retain an experienced and knowledgeable estate planning lawyer, someone who will take the time to learn the details of your financial situation. Based on the unique aspects of your estate, your attorney may make a number of recommendations:
- The use of a will or trust to determine the disposition of assets—Most trusts are “living” or “inter vivos” trusts, into which assets are transferred during your lifetime. If you use a will to create a “testamentary trust,” your property won’t transfer to the trust until after your death.
- The gifting of assets or money during your lifetime—Current federal law allows an annual gift tax exclusion of $18,000 per person, with a lifetime limit of $13,610,000.
- The retitling of property to avoid probate—If you retitle assets, such as real property, bank accounts, or vehicles, jointly with another person, that property will not be subject to probate. This can reduce the financial burden on your heirs and allow property to pass immediately.
In addition to documents that address the distribution of your estate, an effective estate plan should also include:
- A power of attorney, which gives another person the legal authority to act on your behalf if you cannot handle your own affairs
- A medical power of attorney, which gives another person the right and authority to make decisions about your medical care if you cannot
- A living will, which identifies the specific types of care you want (or don’t want) if you are incapacitated
If You Already Have an Estate Plan in Place
It’s a good idea to review the details of your estate plan on an annual basis, considering the following matters:
- Have you or any of your beneficiaries had any significant life changes during the year, including marriage, divorce, death, or the birth of a child. In addition, if you are giving substantial assets to any party, confirm that they have the ability to manage those assets.
- Are the persons or entities you’ve named as beneficiaries to life insurance policies or retirement plans still appropriate. Are there any circumstances that would lead you to name new beneficiaries?
- Identify who will be given the power to act on your behalf in your power of attorney or advance directive. Is it still the right person?
- If you’ve created a living trust, have you transferred all desired, relevant, or eligible property to the trust?
- Are you taking the right steps to minimize potential estate tax exposure? For example, would it be to your benefit to set up an irrevocable life insurance trust?
- If you are above the age of 65, does your estate plan include provisions for minimizing access to pay for nursing home or long-term care?
Once you’ve prepared or updated your estate plan, it’s critical that you talk to family members about your objectives. It may not completely avoid potential conflict, but it can help minimize problems when people know what to expect.
Let Bailey & Galyen Help Ensure That Your Estate Plan Meets Your Needs
At the law offices of Bailey & Galyen, we bring more than 40 years of experience to individuals and families across Texas who have questions or concerns about protecting their estate and distributing their net worth after death. We can help you understand the different estate planning tools, so you can put a plan in place that accomplishes your objectives.
We will prepare and/or review all documents necessary to initiate or update an existing estate plan, and we will help make certain your plan is implemented. To learn more about how we can help you ensure that your estate plan is effectively designed to accomplish your goals, contact us by e-mail or call our offices. Our phones are answered 24 hours a day, seven days a week.
